Santee Cooper, Westinghouse agree on ownership shares of nuclear plant equipment
As Santee Cooper and Westinghouse work toward settling litigation over the failed V.C. Summer nuclear plant project, the two sides have agreed on how assets from the $9 billion project will be divided.
The two sides have agreed to split up ownership of nuclear equipment used in a now abandoned plan to construct two additional nuclear reactors at the Fairfield County power generation site.
The sale of that equipment could net Santee Cooper tens of millions of dollars to help it pay down debt, such as the $3.6 billion that remains on the nuclear project.
State owned utility Santee Cooper was the junior partner in the construction project with SCE&G, owned then by Cayce-based SCANA. Westinghouse was the lead contractor hired by Santee Cooper and SCE&G to carry out the project, long plagued with cost overruns and construction delays. Those problems escalated when Westinghouse declared bankruptcy in March 2017, and the project was eventually scrapped in July 2017.
In the fallout, Dominion Energy acquired SCANA in January 2019. Lawmakers are in the process of determining whether to sell Santee Cooper, allow another company to manage it or leave it as is.
The nuclear construction project debacle was one of the most significant construction failures in South Carolina history, costing ratepayers billions of dollars and shaking to the core once stable electric utilities.
On Thursday, Santee Cooper’s board of directors agreed to a resolution to continue working toward a settlement with Westinghouse, which sued the utility after the project failed, staking a claim on the assets at the site and drawing a counter suit from Santee Cooper. However, there is no timeline on when the settlement would eventually be finalized.
“A lot of work has gone into getting this negotiated settlement where it sits today,” said Santee Cooper Board Chairman Dan Ray. “There is still a little bit of work to do.”
Santee Cooper and Westinghouse have been in litigation since last spring over the defunct nuclear project, fighting over who owns the assets on the site and over whether there have been other opportunities to sell equipment from the $9 billion project.
Equipment that was left behind from the defunct project includes steam generators, reactor coolant pumps, turbines and cooling towers as well as basic construction materials such as rebar, pipes and cables.
Santee Cooper estimates it could net $425 million from equipment sales, money of which would go toward paying off debt associated with the failed project.
Santee Cooper lead attorney Mike Baxley said the utility and Westinghouse have agreed in principle on how equipment ownership will be split up.
- Santee Cooper and Westinghouse each own 50% of the non-installed nuclear equipment on the site.
- Santee Cooper owns 90% of the installed nuclear equipment, with 10% ownership going to Westinghouse.
- Two-thirds of the safety equipment is owned by Santee Cooper, and one-third is owned by Westinghouse.
- Santee Cooper owns 100% of the remaining equipment on site.
Money from the sale of equipment could help reduce customer rate increases needed to cover the debt taken on by Santee Cooper to begin construction of the nuclear facility.
The resolution, approved by the board on Thursday, also sets forth a process of how the two entities will sell the assets.
“This resolution does not settle the case by its own terms and it’s own operation,” Baxley said.
It does allow Santee Cooper’s CEO to finalize pending agreements between the two sides and continue settlement discussions, the attorney added.
The two sides have been in mediation as they worked towards settling the litigation.
Equipment can’t be sold until a settlement is finalized, said Santee Cooper spokeswoman Mollie Gore.
“We’re pleased with where we are,” Gore said. “We think this is a positive outline and look forward to finalizing it.”
Work towards settling the litigation comes as the Department of Administration finalizes a report to legislators on the future of the state-owned utility and whether to sell it, put it under new management, or let the current management stay in place.
This story was originally published February 6, 2020 at 2:39 PM with the headline "Santee Cooper, Westinghouse agree on ownership shares of nuclear plant equipment."
